Managing Public Finances
Managing Public finances is a vital source of development policies of the Govt. leading to poverty alleviation and growth. It is management of country's Revenue (e,g, tax collections), Expenditure, Debt loads, Budget, Deficit/Surplus.
Good policies can do and sail whereas good management of public finances contributes to make trust. The key elements of perfect financial management are:
i) Fiscal framework
ii) Budget preparation
iii) Budget execution
iv) Accounting and sequencing of reforms
v) Control and audit
It promotes-
a) How Govt. allocates resources, b) Promote sustainability, and c) Transparency and oversight mechanisms. It is the responsibility of the Govt. to implement fiscal policy through Budget. Sometimes informal laws of behaviour becomes important but priortising and sequencing of activities are essential as also basics. Following issues be taken into account while making public finance policy.
I) Management of resources
II) Financial crisis
III) Natural disasters
IV) Sustainable development
V) Natural resources
It is a process of cleaning up arrears and put in place a scheme to review the commitments and to act upon its implementation.
GDP equally plays important role in managing public finances to measure growth in the country.In Ratio comparison, India stands at 7th in the descending order starting with USA, China, Japan, Germany, U.K, France. Other countries like Jordan, Nigeria, Peru, Indonesia etc. have faced negative growth due to one or other reasons specified above resulting in managing inflation, unemployment etc. Some of them have adopted Inflation controls e.g.Reduce money supply by decreasing Bond rates, control exercised in Demand-pull and Cost - push effects.Demand -pull effect is when Demand is more than Supply and cost-push effect is increase in production costs and decreased supply.
Such effects have played a major role in stagnating the Inflation.
Good policies can do and sail whereas good management of public finances contributes to make trust. The key elements of perfect financial management are:
i) Fiscal framework
ii) Budget preparation
iii) Budget execution
iv) Accounting and sequencing of reforms
v) Control and audit
It promotes-
a) How Govt. allocates resources, b) Promote sustainability, and c) Transparency and oversight mechanisms. It is the responsibility of the Govt. to implement fiscal policy through Budget. Sometimes informal laws of behaviour becomes important but priortising and sequencing of activities are essential as also basics. Following issues be taken into account while making public finance policy.
I) Management of resources
II) Financial crisis
III) Natural disasters
IV) Sustainable development
V) Natural resources
It is a process of cleaning up arrears and put in place a scheme to review the commitments and to act upon its implementation.
GDP equally plays important role in managing public finances to measure growth in the country.In Ratio comparison, India stands at 7th in the descending order starting with USA, China, Japan, Germany, U.K, France. Other countries like Jordan, Nigeria, Peru, Indonesia etc. have faced negative growth due to one or other reasons specified above resulting in managing inflation, unemployment etc. Some of them have adopted Inflation controls e.g.Reduce money supply by decreasing Bond rates, control exercised in Demand-pull and Cost - push effects.Demand -pull effect is when Demand is more than Supply and cost-push effect is increase in production costs and decreased supply.
Such effects have played a major role in stagnating the Inflation.
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